Economic outlook predicts slowdown for Nevada’s tourism, gaming industries

Nevada’s tourism economy could hit some “bumps in the road” over the next few years, according to the UNLV Center for Business and Economic Research’s annual economic outlook report released Wednesday.

Las Vegas has seen an increase in visitors, gaming revenue and hotel occupancy rates in recovering from the economic crisis brought on by the COVID-19 shutdown in 2020, but expect all three areas to fall in the region over the next two years. research projects.

The report predicts that Southern Nevada visitor traffic will decrease by 5.8% in 2025 and 6.9% in 2026. And for total gaming revenue, a 5.4% decrease is expected in 2025 and 4.6% in 2026.

The report explains that these economic indicators are highly correlated with national economic activity, which the center believes will slow as the Federal Reserve continues to maintain inflation. as they try to avoid recession in the economy. Hotel occupancy is expected to fall 3.8% next year and 4.4% the following year.

“In other words, because the national economy plays a large role in Nevada and Southern Nevada’s economic outlook, CBER’s current forecast for Nevada shows a slowing economy,” the report said.

Stephen Miller, the center’s research director, said that the labor market in Nevada has been restructured over the past few years. He was part of a panel Wednesday at the Fontainebleau Las Vegas detailing the agency’s findings.

Thousands have left jobs in accommodation and food services while jobs in the arts, entertainment and leisure have burned, he said.

The shift between industries has pushed the state’s unemployment rate, 5.6% as of September, above the national rate, Miller said.

It will “take time for people to recognize that (the restructuring) is going to happen – both the person looking for work and the employers who are hiring,” he said. “As soon as they find out that things are changing, they have to change wages and benefits to try and attract workers. “

The recovery of Nevada’s gaming and hospitality industry has been impressive, returning to prepandemic levels faster than most analysts expected, according to the report.

Las Vegas had 40.8 million visitors in 2023, marking a 5.2% increase from 2022. In 2019, before the pandemic, 43 million visited.

Sandip Bhagat, chief investment officer of the Whittier Trust, said at the panel on Wednesday that the United States was on the road to recovery.

In 2022 and 2023, the country’s GDP will grow by at least 1.9%. Bhagat expects growth to continue above 2%.

“To me, the coast is very clear,” he said. “It’s hard for me to find anything that would cause a bear market or a downturn outside of an unexpected exogenous event… which, by definition, is difficult to predict in advance.”

The panelists also grappled with the public’s perception of inflation.

The cost of food and housing has remained high while the rate of inflation has been slow since 2022 – something that economists may better explain during the election, said Andrew Woods, director of the Center for Business Research and UNLV Economics.

Miller said that difference, which has more impact on working-class people, helped President-elect Donald Trump win the White House last week. Quoting Democratic strategist James Carville, “It’s the economy, stupid,” he said.

Woods was reluctant to address the impact Trump would have on mass exports, saying it was too early to tell what would happen. Undocumented immigrants make up 8.6% of Nevada’s workforce, the largest segment in the nation, according to the Pew Research Center.

“We’ve had a very tight staff already,” Woods said. “You squeeze those workers even more, which means wages will go up, and you’ll have employers … (having) a hard time finding specific workers for the workers and will increase prices. “

In terms of housing, the findings show the cost of a single-family home in Las Vegas continues to rise, rising 3.7% in 2025 and 3.3% in 2026. Median price is home in Las Vegas currently $445,000.

In addition to the lack of land to build on, migration from California is also affecting Nevada housing, Woods said.

“You’ve got individuals moving here who have more ability and income than maybe the local population, which is creating some things they don’t have in the housing market,” he said. e.

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